![]() It is displayed in whole numbers - 1 to 5. In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. Zacks Rank Should Not Be Confused With ABR Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement. In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.ĭo you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. While the ABR calls for buying Meta Platforms, it may not be wise to make an investment decision solely based on this information. The forecast calls for 12-month returns of 11.5%, given the average price target clocks in at $235.74.Check price target & stock forecast for Meta Platforms here> ![]() (To watch Erickson’s track record, click here)Įlsewhere on the Street, the stock garners an additional 38 Buys, 7 Holds and 3 Sells, for a Moderate Buy consensus rating. Considering the shares are already up by 77% year-to-date, there’s modest upside of 6% from current levels. How does this translate to investors? Erickson reiterated an Outperform (i.e., Buy) rating to go alongside a $225 price target. “We continue to like the name on critical directional improvements in conversion, campaign performance & measurement relative to last year with an upcoming acceleration/margin expansion narrative still intact,” the analyst summed up, That said, Erickson also thinks there’s a possibility the outsized under-performance maybe due to the fact the platform changes coincided with “some transitory consumer weakness” that came in the wake of the banking crisis.įurthermore, zooming out, Erickson still sees plenty to be upbeat about when considering META’s prospects. macro were mixed though our bias suggests it was more META than others.”Īlthough historically, Erickson says it is not unusual for Meta to exhibit some late quarter “performance volatility,” compared to those seen in the past, this disruption “seemed a bit more persistent.” Therefore, heading into the quarterly readout, Erickson’s bias “leans more cautious.” Responses around drivers being META-specific vs. “Thus,” says the 5-star analyst, “our suspicion is our prior checks likely captured a bit more optimism about Q2 indications than what’s transpired in the 2+ weeks since. This week sees several of the FMAANG gang deliver their latest earnings, and so will Meta ( NASDAQ:META), which will announce Q1’s financials after the close on Wednesday.Īccording to RBC analyst Brad Erickson, however, “some eyebrow-raising 11th hour channel feedback” could potentially put a spanner in the works.Įrickson notes that in the second half of March, Meta made some important platform changes regarding data processing & attribution, and in turn, since the tail end of Q1 and into early Q2, around 50% of his industry contacts have noticed “unexpected ROAS (return on ad spend) and/or CPA (cost per action) deterioration.” These issues were not evident to Erickson on his earlier checks, which took place between March 28-April 3rd.
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